(n) Provisions, contingent liabilities and contingent assets
Provisions:
Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate of such obligation can be made. Provisions
are measured at the best estimate of the expenditure required to settle the obligation at the balance sheet date. If the effect of time value of money is
material i.e., the obligation is to be settled after a year of 12 months from the end of the reporting date, such provisions are discounted to reflect its
present value using a pre-tax discounting rate that reflects the current market assessments of time value of money and risks specific to the
obligation. When discounting is used, increase in the provision amount due to the passage of time is recognized as finance cost.
Contingent liabilities:
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation
that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable
estimate of the amount cannot be made.
Contingent assets:
Contingent assets are not recognized in the financial statement. However when there is a virtual certainty that an inflow of resources embodying
economic benefits will arise from the contingent asset, such asset and the related income is recognized in the year in which the changes occurred.
(o) Income tax
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to
an item recognised directly in equity or in other comprehensive income.
Current tax in the Statement of Profit and Loss is provided as the amount of tax payable (receivable) in respect of taxable income (loss) for the
year using tax rates and tax laws enacted during the year, together with any adjustment to tax payable in respect of previous years.
Deferred tax is recognized on temporary differences arising from the tax bases of assets and liabilities and their respective carrying amounts in the
standalone financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
that does not result from a business combination and at the time of such transaction, affects neither the accounting profit or loss nor taxable profit
(tax loss) for the year. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of
the reporting year and are expected to apply when the related deferred income tax asset is realized or the liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts
will be available against which those temporary differences/losses can be utilized. Minimum alternate tax ('MAT') credit entitlement is
recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified year. In
the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the statement of profit
and loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is
written down to the extent it is not reasonably certain that normal income tax will be paid during the specified year.
Current tax assets and tax liabilities are offsetted where the entity has a legally enforceable right to offset and intends either to settle on a net basis,
or to realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right
to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
(p) Investment property
Investment property are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes).
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are
measured in accordance with Ind AS 16 - Property, Plant and Equipment requirement for cost model, other than those that meet the criteria to be
classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with Ind AS 105 - Non-current
Assets Held for Sale and Discontinued Operations.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in statement of profit and loss in the period in which the
property is derecognised.
(q) Segment reporting
Operating segments are identified in a manner consistent with the internal reporting presented to the chief operating decision maker (CODM).
The chief operating decision maker (CODM) is a function which regularly reviews the financial results of the operating segments for the purpose
of assessing its performance and allocation of funds to such segments. The Company identifies its Managing Committee as the chief operating
decision maker. As per Ind AS 108, the Company has identified the following operating segments:
(i) Spirit, spirituous beverages and allied products
(ii) Marine products
"Unallocated" include revenue and expenses that relate to initiatives / costs attributable to the enterprise as a whole and are not attributable to
segments.
(r) Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting year, the impact of
such events is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only
disclosed.
(s) Earnings per equity share
Basic earnings per share is computed by dividing the net profit for the year attributable to the equity shareholders by the weighted average
number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all years
presented is adjusted for events that have changed the number of outstanding equity shares, without a corresponding change in the resources. For
the purpose of calculating diluted earnings per share, net profit for the year attributable to equity shareholders and the weighted average number
of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares. As on the balance sheet dates, the Company
has no dilutive potential equity shares.
(a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilized in accordance with the provisions of
Section 52 of the Companies Act, 2013.
(b) General reserve
General reserve has been created out of profits earned by the Company in the previous years. General reserves are free reserves and can be
utilised in accordance with the requirements of the Companies Act, 2013.
(c) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfer to general reserves, dividends and other
distributions made to the shareholders.
(d) Other comprehensive income
The Company has elected to recognize changes in fair value of certain investments in equity instruments in other comprehensive income.
The changes are accumulated within "Equity instruments through OCI" under other comprehensive income.
33 Contingent liabilities and commitments (Contd.)
In the ordinary course of business, the Company faces claims and assertions by various authorities. The Management of the Company assesses
such claims and assertions and monitors the legal environment on an on-going basis with the assistance of external legal counsel, wherever
necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such
matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides
disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect to the above pending resolution of the respective
proceedings. The management of the Company remains fairly confident of a favorable outcome and therefore, does not foresee any material
financial liability devolving on the Company and accordingly, no provision has been made.
34 Disclosure in accordance with Ind AS-19 on Employee benefits expense
(a) Post-employment benefits plan:
Retirement benefit plans of the Company comprising of Gratuity, Superannuation, National Pension Scheme and Provident Fund consists of
both defined benefit plan and defined contribution plan. Other long term employee benefits includes compensated absences subject to certain
limits and rules. Gratuity, Superannuation and compensated absences plans are funded through investments in Life Insurance Corporation of
India (LICI). Provident fund for all employees are managed through government administrated funds. Gratuity and Superannuation fund is
managed by a Board of Trustees who are responsible for overall management of the fund and acts in accordance with the provisions of the
respective trust deeds and rules, and in the best interest of the plan participants. The trustees do a periodic review of the solvency of the fund and
play a role in long term investments, risk management and funding strategy.
(b) Defined contribution plans
The Provident Fund, National Pension Scheme and Superannuation Fund has been classified as defined contribution plan as the Company has an
obligation to pay a fixed amount to the government administered fund and Life Insurance Corporation of India (LICI) respectively and has no
further obligation if the assets of such funds are not enough to meet all the employee obligations provided under such plans.
(c) Defined benefit plans
Gratuity plan is a defined benefit plan that provides for lump sum gratuity payment to employees made at the time of their exit by the way of
retirement (on superannuation or otherwise), death or disability. The benefits are defined on the basis of their final salary and year of service and
such benefits paid under the plan is not subject to the ceiling limit specified in the Payment of Gratuity Act, 1972. Liability as on the balance sheet
date is provided based on actuarial valuation done by a certified actuary using projected unit credit method. Board of Trustees administers the
contributions made to the gratuity fund and such amounts are solely invested with Life Insurance Corporation of India (LICI).
(d) Other long-term employee benefits
The Company provides for encashment of accumulated leaves standing at the credit of its employees at the time of their exit by way of retirement
(on superannuation or otherwise), death or disability, subject to certain limits and rules framed by the Company. Liability is provided based on
the number of days of unutilized leave at each balance sheet date based on actuarial valuation done by a certified actuary using projected unit
credit method. The Company had funded such plan with Life Insurance Corporation of India (LICI).
The following table summarises the components of defined benefit expense recognized in the statement of profit and loss/other comprehensive
income ('OCI') and the funded status and amounts recognised in the balance sheet for the respective plans:
(i) These investments are not held for trading. Upon application of Ind AS - 109 - Financial Instruments, the Company has chosen to measure these investments in quoted/unquoted equity
instruments at FVTOCI irrevocably as the management believes that presenting fair value gains and losses relating to these investments in the statement of profit and loss may not be
indicative of the performance of the Company.
(ii) The management assessed that the fair value of cash and cash equivalents, other bank balances, bank deposits, loans to employees, security deposits, trade receivables, other advances,
trade payables and other financial liabilities including security deposits repayable on demand, capital creditors and dues to employees approximate the carrying amount largely due to
short-term maturity ofthese instruments.
(b) Fair value hierarchy
The fair value of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly market
between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent in all the years. Fair value of
financial instruments referred to in note (a) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy
gives the highest priority to quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable entity specific inputs.
The categories used are as follows:
- Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes lied equity instruments, mutual funds that have quoted
price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual
funds are valued using the closing NAV.
- Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable,
the instrument is included in Level 2.
- Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted
equity securities, contingent consideration and indemnification asset included in level 3.
(e) Fair value of assets and liabilities measured at cost/amortized cost
The carrying amount of financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values
since the Company does not anticipate that the carrying amount would be significantly different from the values that would be eventually
received or settled. Management assessed that fair values of cash and cash equivalents, other bank balances, bank deposits, loans to employees,
trade receivables, advance to manufacturing units, trade payables and other financial liabilities approximate their carrying amounts due to the
short term maturities of these instruments.
38 Financial risk management
Company's business activities are exposed to a variety of financial risks like credit risk, market risks and liquidity risk. Company's senior
management is responsible for establishing and monitoring the risk management framework within its overall risk management objectives and
strategies approved by the Board of Directors. Such risk management strategies and objectives are established to identify and analyse potential
risks faced by the Company, set and monitor appropriate risk limits and controls, yearically review the changes in market conditions and assess
risk management performance. Any change in Company's risk management objectives and policies need approval of it's Board of Directors.
(a) Credit risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises
primarily from financial assets such as trade receivables, other balances with banks, loans and other receivables.
(i) Trade receivables
Customer credit risks is managed by each business unit in accordance with the credit policy, procedures and controls relating to credit risk
management. Credit quality of each individual customer is assessed based on financial positions, past trends, market reputation, prevailing
market and economic conditions, expected business and anticipated regulatory changes. Based on this evaluation, credit limit and credit terms
are decided for each individual customer. Exposure to customer credit risk is regularly monitored through credit locks and release. The Company
has a low concentration of risk in respect of trade receivables since its customers are widely spread and operates in diversified industries and
varying market conditions. Export customers are generally secured through letter of credit.
Loss allowance of trade receivables is based on expected credit loss model (simplified approach) depending upon the historical data, present
financial conditions of customers and anticipated regulatory changes. Maximum exposure to credit risks at the reporting date is disclosed in
Note 9. Company does not hold any collateral in respect of such receivables.
(ii) Other financial instruments
Credit risks from other financial instruments includes mainly cash and cash equivalents and deposits with banks. Such risks is managed by the
central treasury department of the Company with accordance with Company's overall investment policy approved by its Board of Directors.
Investments of surplus funds are made in short term debt/liquid mutual funds of rated fund houses having the highest credit rating and in short
term time deposits of reputed banks with a very strong financial position. Investment limits are set for each mutual fund and bank deposits. Risk
concentration is minimized by investing in a wide range of mutual funds/bank deposits. These investments are reviewed by the Board of
Directors on a quarterly basis.
The Company has no exposure to credit risk relating to its cash and cash equivalents. Credit risk for other financial instruments are monitored by
the Central treasury department in accordance with its overall risk management policies. Impairment of such assets is computed per expected
credit loss model (general approach) assessed on the basis of financial position, detailed analysis and expected business of the counterparty to
such financial assets.
(b) Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risks
comprises of three types - interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments
affected by market risks include long term borrowings, investments in mutual funds or equity instruments and derivative instruments.
(i) Foreign currency risk management
Foreign currency is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to change in foreign currency rates.
Company is exposed to foreign currency risks on trade receivables, denominated in United States Dollar ('USD'). Foreign exchange exposures
are managed by the central treasury department in accordance with the overall policy parameters approved by the Board of Directors. Trade
receivables are hedged by entering into forward contracts (to sell USD) with authorized banks that matches the timings of the forecasted receipts.
Carrying amount of Company's financial assets and liabilities denominated in foreign currency (USD) as at the Balance Sheet date is as under:
(c) Liquidity risk:
Liquidity risk is the risk that the Company may not be able to meet its contractual obligations associated with its financial liabilities. The central
treasury department of the Company manages its liquidity risk by preparing and continuously monitoring business plans or rolling cash flow
forecasts which ensures that the funds required for carrying on its business operations and meeting its financial liabilities are available in a timely
manner and at an optimal cost. The Company plans to meet the contractual obligations from its internal accruals and also maintains sufficient
fund based and non-fund based credit limits with banks. Additionally, surplus funds generated from operations are parked in short term debt or
liquid mutual funds and bank deposits which can be readily liquidated when required.
42 Other regulatory information
(a) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly
executed in favour of the lessee) are held in the name of the Company other than those as disclosed in the financial statements.
(b) There were no amounts which were required to be transferred to the Investor Education and Protection Fund.
(c) The Company does not hold any Benami Property and hence there were no proceedings initiated or pending against the Company for holding
any benami property under the Benami Transactions (Prohibitions) Act, 1988 and the Rules made there under, hence no disclosure is required to
be given as such.
(d) The Company has not been declared as wilful defaulter as at the date of the Balance Sheet or on the date of approval of the financial statements,
hence no disclosure is required as such.
(e) There are no charges against the companies which are yet to be registered or satisfaction yet to be registered with ROC beyond the statutory
period, hence no disclosures are required as such.
(f) The Company does not have any investment in any downstream companies for which it has to comply with the number of layers prescribed
under Clause (87) of Section 2 of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017, hence no
disclosure is required as such.
(g) Borrowings taken by the company have been utilized only for the purpose for which it was obtained.
(h) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year, hence disclosure requirements for the
same is not applicable.
(i) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that the Company shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate
Beneficiaries) or
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(j) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with
the understanding that the Company shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate
Beneficiaries) or
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(k) The Company does not have any undisclosed income not recorded in the books of account that has been surrendered or disclosed as income
during the year in the tax assessments under the Income Tax Act, 1961.
43 The Company has used two accounting softwares for maintaining its books of account during the year ended 31 March 2025.
One of the softwares, has a feature of recording the audit trail (edit log) facility, except that the audit trail feature at the application level was
enabled from November 11,2024, but was not enabled throughout the year for certain relevant tables and also not enabled at the database level to
log any direct changes for the entire year. Also, the management is unable to ascertain as to whether there were any instances of the audit trail
feature been tampered with or audit trail has been preserved by the Company as per the statutory requirements prescribed under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.
For the second accounting software, the management is unable to ascertain whether it has a feature of recording audit trail (edit log) facility nor is
the management able to ascertain on whether the audit trail feature has been operated throughout the year for all relevant transactions recorded in
the said software. Also, the management is unable to ascertain as to whether there were any instances of the audit trail feature been tampered with
or audit trail has been preserved by the Company as per the statutory requirements prescribed under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014.
44 Figures of previous years have been regrouped / rearranged / rectified wherever necessary to make them comparable with the current periods
figures.
The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached.
For M S K A & Associates For and on behalf of the Board of Directors of IFB Agro Industries Ltd
Chartered Accountants
ICAI Firm Registration No: 105047W Bikramjit Nag Arup Kumar Banerjee Rahul Choudhary Kuntal Roy
Chairman Executive Vice Chairman Chief Financial Officer Company Secretary and Compliance Officer
Vikram Dhanania DIN: 00827155 DIN: 00336225 Mem. No.: ACS 36912
Partner Santanu Ghosh Debasis Ghosh Soumitra Chakraborty
Membership N°: 060568 Chief Executive Officer - Distillery Business Chief Executive Officer - IML Business Chief Executive Officer - Marine Business
Kolkata, 29 May 2025 Kolkata, 29 May 2025
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